Appearing in front of the House of Commons Environment, Food and Rural Affairs Select Committee inquiry into waste, Palmer-Jones said: “There is political instability, a lack of leadership and a lack of vision. There is a real risk of market failure”.

“I think the withdrawing of Defra from the market, which was signalled by Dan Rogerson (Resource Minister) in his very first speech at the WRAP conference, was a big disappointment to our industry and we feel it is very premature when you look at some of things we have to achieve.”

He said England will find it difficult to reach its household recycling target of 50% by 2020 and an EU proposal to recycle 70% of waste by 2030 because of the reduction of Defra’s activities in waste management.

He also said stability was needed in the marketplace “because we invest in infrastructure and we need a very strong, stable regulatory and legislative outlook for us to do that”.

Viridor director of external affairs Dan Cooke agreed with Palmer-Jones and told MPs it was already “touch and go” whether Britain would hit the 50% target, especially if Defra “took its foot off the throttle”.

Cooke said there had been excellent policies that had come from government in recent years and added: “the most successful one has been the landfill tax”.

He said the landfill tax had given industry clear signals and a framework that has allowed “investment to be forthcoming” and to focus on recycling.

However, Palmer-Jones said the Treasury needed to tell business what the landfill tax would “look like in the next five years” to help “bring on new infrastructure because we can’t go to our investors and say look here is the next window”.

Eco Plastics founder Jonathan Short said England’s progress towards the EU target has slowed significantly, rising just 0.1% in the 12 months to June 2013 to reach 43.3%.

He said government needed to make fundamental changes to the regulatory system, a dedicated educational campaign for consumers and a mandate for manufactures to use recycled products to help the UK maximise its recycling capability and establish a circular economy.

Short, Palmer-Jones and Cooke also blame confusing collection systems and a decline in paper and glass usage for flatlining recycling rates.